Diageo said Thursday first-half operating profit saw double-digit percentage growth as higher sales of its premium brands offset the impact of rising costs and a stronger pound. The company also pledged to increase its share buyback programme.
For the six months ended 31 December, reported operating profit rose to 11% to £2.4bn and net sales rose 5.8% to £6.9 billion. Organic operating profit grew 12.3%
All regions contributed to broad based organic net sales growth, up 7.5%, with organic volume up 3.5%, the company said.
Net cash from operating activities rose £356m to £1.6bn for the half compared to a year earlier, and free cash flow rose £3.17m to £1.3bn.
The interim dividend increased 5% to 26.1p a share and the approved an incremental share buyback of £660m, taking the total programme up to £3.0bn for the year ending 30 June 2019.
The drinks maker left its outlook unchanged.
'This half has benefitted from some one-time and phasing gains in both organic net sales and operating profit, and therefore we continue to expect to deliver mid-single digit organic net sales growth for the year and to expand operating margins in line with our previous guidance of 175 bps for the three years ending 30 June 2019,' the company said.